60 MINUTES: GE'S
CEO, JOHN FRANCIS WELCH JR."Big Companies Will Be
The Biggest Beneficiaries Of The Net"

He's
the gold standard of CEOs. GE's John Francis Welch Jr. was
in India to renew his acquaintance with a market he claims has exceeded
his expectations ''in terms of intellectual capital'', meet with customers
and employees, and inaugurate GE's largest research centre outside the US
(in Bangalore, and it's named after the man). He spoke to BT's R.
Sridharan and
R.
Sukumaron GE's plans for India, its e-biz initiative, and the characteristics
that make it a unique company. Excerpts from an exclusive interview.

Q. Can you tell us about your plans for
India?

A. I'm not the guy with the plans;
the guy with the plans is on my right (gestures to the head of GE's Indian
operations, Scott Bayman). I'm the guy that thinks India is the place to
be, because of its intellectual capital. We are opening a big new
laboratory in Bangalore. Everyone of our business is represented here. We
have an enormous medical business. (GE) Plastics is strong. The Dabhol
power plant (one of GE's customers) is doing pretty well. What have I left
out? We have a great (GE) Capital business here, growing rapidly. So we'll
continue to push those.

At the same time, we will continue to
utilise the great talent here. I started coming here 12 years ago, and I
had great expectations from the market. A large middle class, etcetera. I
had great impressions of the people. I think that we are only over a
billion dollars (the approximate combined turnover of all of GE's
businesses in India) right now. So, our growth has been modest in terms of
the market. It's been slower to develop than I thought. But on the
intellectual front, it's been much better. Much richer than I would have
thought. India has ended up being the second-largest intellectual centre
for GE outside of the US. So, India from an intellectual standpoint has
far surpassed my initial expectations; and from a market standpoint, I've
fallen short. But I'll be patient. Scott will be patient. We will be here
a long time. And we will grow. We had a big number this year, I think.
(looks at Bayman who says: ''We did. That reminds me of the strategy we
coined when he was here last time. It was patience and persistence.'')

Do you see any major change in the
business environment in India?

Scott tells me that approvals are faster
and easier. There's still too much bureaucracy, but it is better than it
was. If you can ever unleash these people who are so good (sighs)... what
a country! If you can only unleash them here; if there's venture capital
money; if there are all those things.... A country so rich in its talent,
and so impeded by its chains. But it's getting better.

Ever since you have taken over at GE,
it's been one growth driver after the other. First, it was globalisation.
Then services. Then it was Six Sigma...

And now the Net.

GE seems to have embraced these drivers
with an almost religious zeal. When you get religious, you can get
religious once. But to get religious four times over, what kind of
organisation does it take?

It takes a culture. First of all, it takes
hiring great people, and we have great people at all levels of the
organisation. Secondly, it takes dedication on the part of the management.
I'm not talking of one person-I'm talking about 140-150 officers to commit
themselves to this effort. To believe in it. To go after it. Finally, it
takes a company that, in 20 years, has four initiatives and not 400. So if
you have one every day or every month, you won't make it.

Today's revolution, the Net, will, by far,
have the biggest impact on our company. It will touch everyone. It will
change the way we work. We have our officers meeting in October. There'll
be 135 officers at Crotonville, New York. The first day will be all about
e-business. All about the buy side, the make side, which is getting
increasing emphasis, and the sell side. The second day, though, will be
about globalisation, services, and Six Sigma. They'll each get a third of
a day. Every one of our initiatives starts out like this.

Globalisation. We're going to sell
products. Then we are going to build factories and make products to sell
in those countries. Then we're going to buy goods from those countries to
serve those factories. Then we start buying them to export to other
countries, because they're good goods. Then we start using
design-metallurgists in Czechoslovakia; design engineers in India. Now we
see that it has expanded to R&D and intellect. When we started out, we
didn't think we would be going for intellect in globalisation.

Services. We saw we needed our best
technologists in service. If I sell you a turbine or a medical equipment
piece, you'll like me a lot more if I don't come back two years from now
and say to you: ''Hey, I got a better one.'' You'll like me a lot more if
I come back to you and say: ''Keep your cat scanner right there, here's a
piece of software for it that will help you get twice the throughput and
three times the images." Productivity for the customer became an
enormous part of the services thing.

In fact, we didn't begin by thinking that
way. But, because we have this company that is looking for a better way
every day... It's a badge of honour to take someone's ideas, not reject
it. That may seem like a little thing. It's a HUGE thing. I brag about the
ideas we got from Motorola; from Hewlett Packard; from Toyota. So people
get the feeling that getting an idea is a great thing.

But how do you build stability of vision
when you are acquiring companies by the hundreds each year?

Very quickly. We have integration teams
that are on them right away. Some people leave if they don't like it, some
people love it and stay. But we don't fool around. That's a lesson we
learnt over the years. We used to say, ''Well, they are entrepreneurs,
they've got their own thing''...we don't do that any more.

Take Six Sigma. When we started that, it
was all about productivity, about doing things better, and then it moved
to designing products more effectively. Now it is Six Sigma for the
customer. Our black belts are living in customer shops, helping them
improve their businesses. Who would have thought of that when we started
Six Sigma?

So, each one of these ideas swells into a
much bigger idea. Take the Net, for example. When we started out, we
copied the dot.coms. We were buying goods and we were selling goods. We
did not recognise that the real opportunity lay in the making of goods.
That's why the big old companies are the biggest beneficiaries of the Net.
We (already) know how to make products, and we know how to fulfil
products. That's the hard part. What we didn't know was how to digitise
it. Now you digitise it and you win big, because you've got all the
inefficiencies out of the system. But again, we didn't start that way. We
started with an auction site, buying stuff and selling it. Now we are just
possessed by the make part.

How do you manage to proselytise your
people so fast? Until last year, the buzz at GE was Six Sigma. Today, it
is the Net.

I have a great team of people. And we are
able to come to this conclusion that we are going to do something
together. I only convince them to do it. They, then, go back and convince
their own people.

We have a system not unlike a computer's
operating system. It starts out in January in Boca Raton (Florida), where
we give the message to 500 of the top managers. Then, in March, the
Corporate Executive Council (CEC), which is 30 people, checks progress on
the initiative.

We are talking about ideas, the ones
they've (the 500 key people) come up with. Then we go out and review them.
And we spend 15-16 hours a day on each point. And we interview the leaders
of the initiative. They make a presentation to us. So, we say: ''Hey, may
be there are some good people, but may be there are some turkeys leading
the initiatives.''

In June, we have another CEC to follow up.
In July, we go over the initiatives again. We have a video-conference-two
hours with each business on the people process. ''What did you say you
were going to do in April and May? Did you do it by July?'' But the people
process is not separate. It is tied to the things we said in January. In
September, we have another CEC, and we go over the best practices. By now,
new ideas have come out, people grab them, and go with them. In October,
we bring out the best examples of what was said in January-about 30
ten-minute presentations by people who demonstrated role-model behaviour
on the initiative. So, everything flows from this (continuous review).
When I ask my people what's different about GE from where they came from,
they'll say it's the relentless consistency.

What kind of a company did you take
charge of in 1981 and what kind of a GE will you leave for your successor
in April next year.

I took over a good company in 1981 that a
whole lot of us made better. My successor will take over a great company
in April and make it much greater. And that's what the job is all about.

Is Wall Street still refusing to come to
terms with GE as a digitised corporation?

If you look at our price-to-earnings
multiple (50), it's quite good. We are very happy with it. We always think
that the stock is too low, based on what we know. But every company in the
world, I am sure, feels that way. We couldn't be happier; we are No. 1 in
(terms of) market cap today.

A final question. What really does Jack
Welch think of Jack Welch?

Well, I've always been the same person I
was in high school. So, I am not any different. I am surprised that people
interview me. I wonder who that person is in the suit who does the
talking.

It's true. People meet me in ball games and
shake hands with me and stuff like that. I am stunned every time. I still
hang around with guys I hung around with in high school. I don't have any
great self-impression.

I am very comfortable with myself. But I am
sort of stunned by the whole game. I don't know what else to say.